TaxTMI 
TaxTMI 
2022 (4) TMI 1659
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....y this consolidated order. First we shall take up the appeal filed in IT(SS)A No. 51/CTK/2019 for A.Y. 2011- 2012 in the case of Ritanjali Khatai and the facts and grounds mentioned therein shall be taken into consideration for deciding all the appeals. 3. The assessee-Ritanjali Khatai in IT(SS)A No. 51/CTK/2019 for A.Y. 2011-2012 has raised the following grounds :- 1. That, the Assessment Order passed under the section 153A r.w.s. 143(3) is not sustainable in view of the fact that no incrementing materials were found during the course of search and therefore the Ld. Assessing Officer is not permitted to disturb of the completed assessments or unabated assessment and the Ld. Commissioner of Income Tax (Appeals) committed an error of law in endorsing the action of the Ld. Assessing Officer. 2. That the assessment order passed u/s 153A r/w section 143(3) is not sustainable in view of the fact that the proper procedure of law has not been followed by the Ld. Authorities below while granting the approval u/s 153D Act. Therefore the assessment order is liable to be quashed. 3. That, the Ld. Commissioner of Income Tax (Appeals) committed an error of law in c....
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....ct is not sustainable as there was no approval u/s. 153D of the Act. In this regard, Id. AR filed his paper book consisting of 201 pages and submitted that the approval given by the Joint Commissioner of Income Tax (JCIT) is mechanical in nature and, therefore, the assessment order passed by the assessing officer is invalid. It was submitted by the Id. AR of the assessee that while granting approval u/s. 153D of the Act by the JCIT, proper procedure has not been followed and no incriminating material was found for the assessment year under consideration. Ld. AR of the assessee referring to the provisions of Section 153D of the Act, submitted that provisions of section 153D implies that the meaning of approval is not simple approval or approval of the order in the mechanical manner. While granting approval u/s. 153D of the Act, almost same principle and procedure has to be adopted and followed as required for grant of approval u/s. 151 of the Act. The Joint Commissioner must have to go through the seized documents, notices issued by the AO, submissions made by the assessee and also documents submitted by the assessee and then he had to apply his judicious mind to all the relevant re....
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....rary. The golden rule is that the words of a Statute must prima facie be given their ordinary meaning. When the words of a Statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of the consequences. It is said that the words themselves best declare the intention of the law giver (Hon'ble Supreme Court in the case of Union of India v. Tata Chemicals Ltd. (363 ITR 658) (para-22). b) The approval granted under section 153D of the Act by the Supervisory officer (Jt. CIT) is merely an Administrative order and no civil or penalty consequences flow from such an order against the assessee. The approval of Supervisory officer is totally distinct from the assessment order and not required to be communicated. Hence it is not open for challenge before the Court of Law. Once the reasons for Administrative Approval are not required to be communicated to the assessee then it is not permissible in law to permit the assessee to agitate the reasons for passing the Administrative Approval. The Approval granted by the Supervisory officer (Jt. CIT) is not justiciable law. It is submitted that the subject matter of the proceeding befo....
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.... have been mentioned by the ]CIT, Central Range-, Bhuvaneshwar while according approval. There is absence of any dissenting note in the approval granted u/s. 153D of the Act. It must be noted with due caution that he had enough time of 6 days to go through the seized documents, appraisal report, enquiries made by the A.O. and draft assessment orders. In the present case, the Supervisory Officer (]CIT, Central Range, Bhubaneswar) has duly applied his mind; he has gone through the records; he has analyzed the statements made during the search as well as the seized documents etc. In this regard, kindly refer to para-6.2 on page-7 of the appellate order passed by the CIT(Appeals)-2, Bhubaneswar dated 15.04.2019 for A.Y. 2011-12 which is reproduced as under: "6.2 I have carefully examined the assessment order and the submissions of the appellant. It is seen that the A.D. who is based in Bhubaneswar has sent draft assessment orders to the JCIT vide his letter dated 17.11.2017 along with the assessment records. The JCIT accorded his approval u/s. 153D of the Income Tax Act by letter dated 23.11.2017. The fact of according approval is clearly mentioned in the letter of JCIT. It is....
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....been mentioned by the JCIT, Central Range, Bhuvaneshwar while according approval. There is absence of any dissenting note in the approval granted u/s. 153D of the Act. g) The decision of Hon'ble Pune ITAT in the case of Akil Gulamali Somji (20 taxmann.com 380) has been rendered on different facts and circumstances. In the case of Akil Gulamali Somji, the AO while framing the assessment u/s. 153C had failed to obtain the necessary approval u/s. 153D (Para-3 on page-7). However in the present case, the JCIT, Central Range, Bhuvaneshwar has accorded approval vide his letter dated 23.11.2017. h) In the case of Kailash Moudgil vs. DCIT (72 ITD 97), "it was held by the Hon'ble Delhi IT AT in para- 31 on page- 2 4 that provisions of section 158BC do not require the Commissioner to record his reasons in writing while approving the order of the Assessing Officer under section 158BG proviso and for that reason, the assessment order passed under section 158BC does not suffer from any infirmity. It was further held that the approval of the Commissioner without recording any reasons in writing for approving the order would not render the order of the Assessing Officer ....
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....ow deserves to be affirmed dismissing the appeal of the assessee. 10. Having heard to the submissions made by the parties and perused the relevant documents placed on the record as well as the orders of the authorities below and with the consent of parties, proceeded to decide the issue raised by the assessee in ground No. 2 regarding procedure of law not followed by the AO while passing the assessment order framed u/s. 153A/143(3) of the Act. During the course of hearing, at the outset, Id. AR of the assessee drew our attention to the approval letter issued by the Joint Commissioner of Income Tax (Central), Bhubaneswar according approval u/s. 153D of the Act for passing the assessment orders in respect of the assessee and other group concern. On perusal of the same, we found that the approving authority has not applied his mind to the assessment records and draft assessment orders proposed to be passed by the Assessing officer as per mandate of section 153D of the Act, which is clearly discernible from the approval order dated 23.11.2017. As per mandate of section 153D of the Act, no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of J....
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....2014-15 9,53,00,070/- u/s 153A/143(3) 6 2015-16 16,51,32,390/- u/s 153A/143(3) 7 2016-17 14,72,53,800/- u/s 143(3) Sd/- (Joint Commissioner of Income Tax (Central), Bhubaneswar And, the approval given in the case of the present assessee, which read as under :- "OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX (CENTRAL), AAYAKAR BHAWAN ANNEXE. 4TH FLOOR. RAJASWA VMAR BHUBANESWAR-751007 F.No .JCIT(Central) /BBSR/153D CC-1 BBSR/2017-18/ 3138 Date: 23.11.2017 To The Assistant Commissioner of Income Tax, Central Circle-1, Bhubaneswar Sub: Approval of the Assessment orders u/s 153D of the LT. Act, 1961 in respect to the cases of M/s Dillip Construction P Ltd- Reg Ref: Your letter No. ACIT/CC-I/BBSR/Report/2017-18/10 dated 17.11.2017 seeking approval of draft assessment orders u/s 153D Approval is hereby accorded as per the provisions of section 15 3D of the I.T.Act tor passing the assessment orders in respect to the following cases. SI. No Name of the assessee PAN AY. Total Asessed Income (Rs.) Section under which order passed. 1 Ritanjali Kh....
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....d 23.11.2019 curbing the mistake in the procedure adopted by the JCIT while granting approval u/s. 153D of the Act. On these subsequent letters/correspondences, we are of the considered view that for adjudicating legal ground of assessees challenging the validity of approval u/s. 153D of the Act dated 23.11.2017, we have to evaluate said approval apparently by considering the totality of facts and circumstances and the manner in which such approval has been granted. This cannot be improvised by way of subsequent exercise or correspondence between the approving authority and the AO or other officers. 33. In view of foregoing discussion, we are inclined to hold that the Id JCIT has granted approval under section 153D of the Act in a mechanical manner without application of mind to the relevant assessment records and draft assessment orders submitted before him by the AO for grant of approval u/s. 153D of the Act before passing the relevant assessment orders u/s. 153A r.w.s 143(3) of the Act. 34. Considering the facts and circumstances of the case in the light of above discussion, it is amply clear that the AO vide latter dated 17.11.2017 requested the Approving Auth....
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....he duty towards both the assessee as well as revenue to follow the proper procedure and to apply his mind on the material, relevant evidences and other documents including materials found during search & post search investigations and explanation & supporting documents of the assessee to the issue show caused to him by the AO, on the basis of which the AO wants to pass or frame assessment or reassessment orders and after such exercise by perusing and going through the relevant assessment folders/files alongwith proposed draft orders and also by applying his mind has granted approval u/s. 153D of the Act. This is the minimum required exercise by the approving authority before granting approval u/s. 153D of the Act. The approving authority has undertaken any such exercise should be discernible from the order of the approval and the subsequent internal correspondence between the lower authorities have no relevance and the defects or omissions or non-application of mind cannot be cured or rectified by any other exercise or working undertaken by the approving authority after grant of approval and after passing the assessment orders u/s. 153A of the Act by the Assessing officer. ....
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....rties i.e. revenue and the assessee. Therefore, the provisions of section 153D of the Act cannot be treated as a mere formality and mandate therein required to be followed by the approving authority in a judicious manner by due application of mind in a manner of cautious judicious or quasi judicial authority. This view has also been expressed by Pune Bench of the ITAT in the case of Akil Gulamali somji, in ITA Nos. 455 to 458(Pune) of 2010 vide order dated 30.3.2012, wherein, it was held that when the approval was granted without proper application of mind, the order of assessment will be bad in law. We also take respectful cognizance of the fact that the Hon'ble Bombay High Court in the case of Akil Gulamali Somji (supra) has concurred with the said findings and view taken by the Pune Tribunal that not following the provisions of section 153D of the Act will render the related order of assessment void. 39. In view of foregoing discussion, we reach to a logical conclusion that it is the duty of the approving authority to act in accordance with the mandate and provisions of law while granting approval and discharging statutory function lay on his shoulders by following ....
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.... granted by the Id JCIT in the appeals under consideration has been granted in a mechanical manner without of and application mind that the assessments/reassessment orders passed by the AO on such approval are declared to be void and bad in law. We hold so. 41. In view of aforesaid discussion, we clearly find that approving authority has not applied his mind to the relevant assessment records and draft assessment orders prior to granting approval to the Assessing officer for passing assessment orders u/s. 153A/143(3) of the Act. Therefore, the contention of Id A.R. of the assessee is justified and sustainable that the approval was granted in most mechanical manner without application of mind and respectfully following the proposition rendered by Hon'ble Bombay High Court in the case of Smt. Shreelakha Damani (supra), the order of ITAT Delhi Bench in the case of M3M India Holdings (supra) and decision of ITAT Cuttack Bench in the case of Geetarani Panda (supra), we hold that no valid approval has been sanctioned or accorded by the Id JCIT before allowing the AO to pass the relevant assessment orders. From the relevant approval orders dated 23.11.2017, it is vivid that I....